FOX Business' Jeff Flock reports on the latest news from the auto industry, where data reveals that insurance rates are skyrocketing year-over-year.
The cost of owning a car in the U.S. has skyrocketed in recent years, and data suggests Americans are likely in for an even bigger shock.
a Recent Reports Car shopping guide Edmunds points out a stark disconnect between what car buyers plan to spend on their next vehicle and the average price of new and used cars currently on dealer shelves.
New data from Edmunds shows a disconnect between what consumers expect to pay for a new car and current average list prices. (Scott Olson/Getty Images/Getty Images)
According to an Edmunds survey, 73% of consumers say they are holding off on their next vehicle purchase as supply chain issues and inventory shortages have caused prices to rise since the pandemic.
Nearly half (48%) of new car buyers surveyed said they would like to spend less than $35,000 on their next vehicle, while 14% said they would like to spend less than $20,000.
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But the average transaction price of a new vehicle in July was $47,716, and there were virtually no new car transactions below $20,000, according to Edmunds data.
Prospective car buyers can also expect to encounter some unpleasant surprises when it comes to financing the purchase of their next vehicle.
Edmunds data suggests potential car buyers may be surprised by both the price and the interest rate. (David Paul Morris/Bloomberg via Getty Images/Getty Images)
The report found that three in four used-car buyers are aiming for an interest rate between 0% and 5% but six in 10 people who bought a used car on loan in July ended up with an interest rate between 6% and 11%.
Auto insurance is also expected to rise in price: A report released last month by Insulify predicted that auto premiums will rise 15% in the first half of 2024, up from 22% the year before.
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Most consumers seem to know they'll have to prepare to pay more for cars — 54% of car buyers told Edmunds they plan to work more hours or get a new job to help pay for their next car — but the rising costs may be greater than many expected.
Traffic on the Long Island Expressway near Lefrack City, Queens, New York. (Lindsay Nicholson/UCG/Universal Images Group via Getty Images)
Already this year, more Americans are finding it difficult to make auto loan payments.
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A recent study by Cox Automotive found that the volume of repossessed vehicles at the Manheim auction, the largest wholesale marketplace, is expected to increase 23% year-over-year through the first half of 2024. It's also up 14% compared to the same period in 2019, the data showed.
